As of this year, taxpayers have the obligation to disclose “reportable schemes” to the Tax Administration Service (“SAT”) by which a tax benefit is or has been obtained in Mexico.
- The deadline for disclosing the reportable schemes is February 15, 2021.
- A review of 2020 operations must be done to determine if they should be disclosed.
- In our opinion, the maquila industry, in principle, has no obligations to disclose, however, SAT has a different opinion, thus it expects maquiladoras to disclose.
What is a reportable scheme?
Any plan, project, proposal, advice, instruction, or recommendation expressed or implied with the purpose of materializing a series of legal acts that generate, directly or indirectly, the obtaining of a tax benefit in Mexico.
Who are the parties required to disclose Reportable Schemes?
As a rule, the “tax advisor” that falls within the definition under the Federal Fiscal Code and taxpayers are the ones who must report.
Is there an obligation for the Taxpayer to disclose?
Taxpayers have the obligation to disclose when (i) the tax advisor does not comply with the obligation to disclose; (ii) when it agrees with the tax advisor that it will be the taxpayer who discloses; (iii) that is advised by someone that is not considered a tax advisor or; (iv) when the taxpayer is the one who prepared the scheme.
What are the reportable schemes?
These are examples of reportable schemes:
- Foreign authorities are prevented from exchanging tax or financial information with Mexican authorities.
- There is a transfer of tax losses to a taxpayer different from the one that it generated them.
- Exists payments or interconnected operations, which return the amount paid to the person who made it, to any of its partners, shareholders, or related party.
- There are related party transactions, such as a) Exchange of intangibles assets that are difficult to be valued; b) business restructurings; c) services are provided and/or the temporary use or enjoyment of goods and rights is granted, without financial retribution.
- When actions to avoid a permanent establishment in Mexico are taken.
- Avoiding the identification of the beneficial owner of income or assets.
- When profits are generated to absorbed tax losses when the amortization term is about to decrease.
- Avoiding the application of dividend rates is avoided.
- When the lessee grants the use or enjoyment of the asset to the lessor or a related party of the lessor.
When does the disclosure to reportable schemes have to be disclosed and/or filed?
Advisors: 30 business days following the day on which the first contact for marketing is made.
Taxpayer: 30 business days following the day on which the scheme is available to the taxpayer for its implementation, or the first event or legal act that is part of the scheme is performed.
February 15, 2021: If the reportable scheme was generated in the fiscal year 2020 (or even earlier, but its tax effects are constant and in force for the taxpayer).
Are the fines if we fail to disclose?
Yes, from 50% to 75% of the amount of the tax benefit of the reportable scheme or up to 2 million pesos when the scheme is not disclosed.
Given the variety of schemes or that may exist in each taxpayer, in case you have doubts regarding the disclosure of the scheme, in TP Legal we have specialized personnel that can provide tax advice regarding this type of obligation.
Alejandro Pedrín | firstname.lastname@example.org
Héctor Torres-López | email@example.com
Leobardo Tenorio-Malof | firstname.lastname@example.org
Mauricio Tortolero | email@example.com
Daniel Gancz-Kahan | firstname.lastname@example.org
Alejandro Ceballos | email@example.com
Elio Sánchez | firstname.lastname@example.org
Iván Curiel-Villaseñor | email@example.com
Raúl Escamilla-Sanromán | firstname.lastname@example.org